Small businesses depend on their executive structure more than large corporations — namely because with a small business, the executive staff is a small number of people, rather than an entire team. At the top of the ladder, and of utmost importance, is the CEO (chief executive officer), whose executive responsibility is to shape the company's direction and lead it to success. In a small business, having the right person in the CEO spot is critical to success, because they’re the ones calling the shots.
The Chief Executive Officer’s Job Description
The chief executive officer job description is to increase shareholder value by executing a series of strategies to improve the business. While a publicly owned corporation answers to its board of directors and other shareholder representatives, for a small business, shareholders might be the owner(s), financiers and/or other related supporters. While there’s no set standard list of duties, the CEO’s responsibilities are expected to include:
- Face of Communication: Communicating company information and updates, as the company representative, to the board of directors, government organizations and the public, including formal communications such as reports, press releases and regulatory documents.
- Vision and Mission: The CEO sets, and then implements, the ultimate vision and mission for the company, which is the top-tier image of the company’s success and represents the goal(s) the company is working toward.
- Strategy Development: The CEO is responsible for developing both short-term and long-term strategy for the business at the top level; these are the strategic tools the company will use to fulfill its vision and mission.
- Goal-Setting: The strategy should include goals for the business that are clear, measurable and achievable; these goals should also be constructed in a way that will enable them to be filtered down to other employees.
- Performance Management: Setting a standard for individual performance, including company culture, by hiring and evaluating top-level executives and managers.
- Industry Awareness: The CEO should be aware of the market landscape, the general status of competitors and industry developments and should be open to new business opportunities that arise.
- Risk Analysis: The CEO is responsible for recognizing risks in the market environment and developing strategies to minimize said risk.
- Social Responsibility: Recognizing that the company is part of a community, staying aware of local and global issues, operating ethically and responsibly and finding ways to give back to its community and its employees.
Small Business CEOs
In a small business, the concepts behind these responsibilities remain the same, but the execution of them will vary somewhat. A small business CEO is more likely to be involved in the day-to-day business, and the scope of their work must be smaller and more focused at first due to the nature of the business.
Responsibilities of a CEO
The CEO of a small business is still responsible for communicating company information to shareholders, the public and often internally to employees as well. It also often falls on the CEO to be the face of communication to government and legal entities, to fulfill regulatory requirements. They’re also likely to be more visible in the community, because small businesses often depend on community response in order to get off the ground; the CEO will be more aware of social responsibilities and the local community with a smaller organization.
Strategically, the small business CEO’s responsibilities remain the same: they must provide and implement the vision for the business, develop short-term as well as long-term strategies to achieve this vision and translate those strategies into short- and long-term goals the business will strive for. With a small business, it’s even more important that these goals are measurable and describable, because a small business has very little buffer for mistakes and risks.
To do so, the CEO also still needs to be aware of the competitive environment and industry risks, although the scope is different. A small business focused on the internet should start by narrowing the competitive landscape down to the competitors most similar; a local small business is likely to only need to look at other local competitors, rather than a global collection. This can be something a CEO might outsource, if they don’t necessarily have a background in this sort of market analysis.
Internal CEO Duties
Internally, the CEO is more likely to be involved in hiring and employee development, especially in the early days of a small business when the company is still working to establish itself. Those early employees are key to getting a startup off the ground, and the CEO is likely to be the one making those important hiring decisions. They’re more likely to drive the development of employee responsibilities and set standards for performance management.
Effective CEO Leadership
The CEO of a small business needs to be not just a leader but the leader; they’re setting the example for the rest of their employees on what the company culture needs to be. Leadership is both an attitude and a set of actions; the CEO needs to embody both the personality of a leader and the ability to take charge and make changes. To effectively lead, the CEO should maintain a positive, motivated and dedicated image; they should have confidence that the business will succeed and be approachable enough that employees feel their voices can be heard.
One of the most important things a CEO should be able to do for a small business is to create a plan, then share that plan, and share the contingencies developed for if and when the plan deviates from its path. This builds confidence in the employees and helps them trust that the company will be able to deal with upsets. Within a small business, the CEO should also be accessible; an open-door policy, or a weekly time scheduled to reach out to the rest of the employees, can help answer questions and build interpersonal work relationships.
Delegating Tasks of a CEO
A CEO of a small company should definitely consider delegating certain tasks to others, especially once business picks up and their time becomes highly in demand. One of the best things to delegate are the sets of legal responsibilities and government regulations the company falls under; these things usually require an expert in their field as a sort of consultant to make sure everything is filed appropriately.
If the CEO isn’t experienced in the finances involved in small business, they should also consider appointing a CFO (chief financial officer) or a head of finance, who can bring that skill set into the company. Other alternatives include delegating the implementation and day-to-day operational steps to a COO (chief operating officer) or President, who can focus on the details of the big-picture vision the CEO needs to focus on.
Overall, the CEO and their plans should inspire the rest of the business. The CEO’s responsibilities aren’t just to create the vision and strategy; they should then use those goals and objectives to motivate employees into action. Successful leadership comes from thorough planning, an understanding of the corporate landscape and the ability to cast forward into the future and imagine where the business needs to go in order to be successful. Especially for a small business, the CEO’s direction and voice are critical, because it forms the foundation of the path the company will follow as it moves forward.